8-K/A 1 fppc8ka1.htm

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K/A-1

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 11, 2004

               FIELDPOINT PETROLEUM CORPORATION                
 (Exact name of registrant as specified in its charter)

           Colorado           

    0-9435    

   84-0811034  

(State or other jurisdiction of incorporation or organization)

(Commission file number)

(IRS Employer Identification No.)

   1703 Edelweiss Drive, Cedar Park, Texas 78613   
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (512) 250-8692

_____________________________________________________
(Former name or former address, if changed since last report)

ITEM 2.     ACQUISITION OR DISPOSITION OF ASSETS

       FieldPoint Petroleum Corporation (the "Company") consummated the purchase of a 87.5% to 100% working interest representing a 73.5% to 87.5% net revenue interest in oil and gas properties located in the Lusk Field in Lea County, New Mexico from PXP Gulf Coast, Inc. The acquisition was accomplished through an assignment of mineral leases covering the interests. The Company paid $850,000.00 cash consideration for the lease rights and related equipment. The funds for the acquisition were derived from the Company's existing revolving credit facility.

       Closing of the acquisition took place on March 11, 2004, with the effective date being April 1, 2004. The Company plans to hold the interests for production and further development.

ITEM 7:     FINANCIAL STATEMENTS AND EXHIBITS
 

(a)

Financial Statements
   

Pursuant to Item 7(a)(4), the Registrant files herewith the following financial statements of the acquired business:

Independent Auditor's Report

Historical Summaries of Revenues and Direct Operating Expenses of Properties Acquired in March 2004

Notes to Historical Summaries of Revenues and Direct Operating Expenses of Properties Acquired in March 2004
 

(b)

Pro Forma Financial Information
   

Pursuant to Item 7(b), the Registrant files herewith the following unaudited pro forma financial information:

Unaudited Pro Forma Consolidated Balance Sheet as of December 31, 2003

Unaudited Pro Forma Consolidated Statement of Income for the Twelve Months Ended December 31, 2003

Unaudited Pro Forma Consolidated Statement of Income for the Three Months Ended March 31, 2004

Notes to Unaudited Pro Forma Financial Information
 

(c)

Exhibits
   

Item

Title
   

10.1

Assignment

INDEPENDENT AUDITOR'S REPORT

Board of Directors
FieldPoint Petroleum Corporation
Cedar Park, Texas

We have audited the accompanying historical summaries of revenue and direct operating expenses of properties acquired in March 2004, for the year ended December 31, 2003. The historical summaries are the responsibility of the Company's management. Our responsibility is to express an opinion on the historical summaries based on our audit.

We conducted our audit in accordance the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the historical summaries are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the historical summaries. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall historical summaries presentation. We believe that our audit provides a reasonable basis for our opinion.

The accompanying historical summaries were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission (for inclusion in the Form 8-K of FieldPoint Petroleum Corporation) as described in Note 1 and are not intended to be a complete presentation of the properties' revenues and expenses.

In our opinion, the historical summaries referred to above present fairly, in all material respects, the revenue and direct operating expenses of the properties acquired in March 2004, in conformity with accounting standards generally accepted in the United States of America.

HEIN + ASSOCIATES LLP

May 20, 2004
Dallas, Texas

FIELDPOINT PETROLEUM CORPORATION

HISTORICAL SUMMARIES OF REVENUES AND DIRECT OPERATING EXPENSES OF PROPERTIES ACQUIRED IN MARCH 2004
 


For the Three
Months Ended
March 31,

  


For the Three
Months Ended
March 31,

  

For the Twelve Months Ended December 31,

 

2004

  

2003

  

2003
 

(Unaudited)

  

(Unaudited)

    

OIL AND GAS SALES

$   64,625

  

$    48,639

  

$   186,823

DIRECT OPERATING EXPENSES


     14,315

  


      10,485

  


       43,812

NET REVENUE

$   50,310

  

$    38,154

  

$   143,011

 See Notes to Historical Summaries

FIELDPOINT PETROLEUM CORPORATION

NOTES TO HISTORICAL SUMMARIES OF REVENUES AND DIRECT OPERATING
EXPENSES OF PROPERTIES ACQUIRED IN MARCH 2004

1.    Basis of Preparation

The accompanying historical summaries of revenues and direct operating expenses relate to the operations of the oil and gas properties acquired by FieldPoint Petroleum Corporation (the "Company") in March 2004 from PXP Gulf Coast, Inc. The properties were acquired for $850,000, before purchase adjustments.

Revenues are recorded when the Company's share of oil or natural gas and related liquids are sold. Direct operating expenses are recorded when the related liability is incurred. Direct operating expenses include lease operating expenses, ad valorem taxes and production taxes. Depreciation and amortization of oil and gas properties, general and administrative expenses and income taxes have been excluded from operating expenses in the accompanying historical summaries because the amounts would not be comparable to those resulting from proposed future operations.

The historical summaries presented herein were prepared for the purpose of complying with the financial statement requirements of a business acquisition to be filed on Form 8-K as promulgated by Regulation S-B Item 3-10 of the Securities Exchange Act of 1934.

2.    Supplemental Information on Oil and Gas Reserves (Unaudited)

Proved oil and gas reserves consist of those estimated quantities of crude oil, natural gas, and natural gas liquids that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. Proved developed oil and gas reserves are reserves that can be expected to be recovered through existing wells with existing equipment and operating methods.

The following estimates of proved reserves have been made by independent engineers. The estimated net interest in proved reserves are based upon subjective engineering judgments and may be affected by the limitations inherent in such estimation. The process of estimating reserves is subject to continual revision as additional information becomes available as a result of drilling, testing, reservoir studies and production history. There can be no assurance that such estimates will not be materially revised in subsequent periods.

The changes in proved reserves of the properties acquired in March 2004 for the year ended December 31, 2003 are set forth below.
 


Oil
(Barrels)

  

Natural Gas
(Thousand Cubic Feet)

Reserves at December 31, 2002

122,721 

  

123,372 

Production

     (5,444)

  

     (6,095)

Reserves at December 31, 2003

  117,277 

  

  117,277 

Proved developed reserves December 31, 2003

  117,277 

  

  117,277 

The standardized measure of discounted estimated future net cash flows related to proved oil and gas reserves at the year ended December 31, 2003 is as follows:
   

December 31,
2003

Future cash inflows

  

$ 4,339,000 

Future production costs

  

   1,956,000 

Future net cash flows, before income
     tax

  


2,383,000 

Future income taxes

  

    (521,000)

Future net cash flows

  

1,862,000 

10% annual discount

  

 (1,043,000)

Standardized measure of discounted
      future net cash flows

  


$   819,000 

The primary changes in the standardized measure of discounted estimated future net cash flows for the year ended December 31, 2004 were as follows:

   

December 31,
2004

Beginning of year

  

$   544,000 

Sales of oil and gas produced, net of
     production costs

  


(143,000)

Effect of change in prices

  

488,000 

Accretion of discount

  

54,000 

Net change in income taxes

  

(142,000)

Revision of estimates and other

  

      18,000 

End of year

  

$  819,000 

Estimated future cash inflows are computed by applying year-end prices of oil and gas to year-end quantities of proved reserves. Estimated future development and production costs are determined by estimating the expenditures to be incurred in developing and producing the proved oil and gas reserves at the end of the year, based on year-end costs and assuming continuation of existing economic conditions. Estimated future income tax expense is calculated by applying year-end statutory tax rates to estimated future pre-tax net cash flows related to proved oil and gas reserves, less the tax basis of the properties involved.

The assumptions used to compute the standardized measure are those prescribed by the Financial Accounting Standards Board and as such, do not necessarily reflect the Company's expectations of actual revenues to be derived from those reserves nor their present worth. The limitations inherent in the reserve quantity estimation process are equally applicable to the standardized measure computations since these estimates are the basis for the valuation process.

FIELDPOINT PETROLEUM CORPORATION

UNAUDITED PRO FORMA FINANCIAL INFORMATION

In March 2004, FieldPoint Petroleum Corporation (the "Company") acquired interests in certain producing properties in New Mexico for consideration of $850,000. The acquisition was financed using the Company's existing available cash. The following unaudited pro forma financial statements have been prepared to demonstrate the effect on the Company's financial position and results of operations as if the properties had been acquired on December 31, 2003 (with respect to the pro forma balance sheet) and at the beginning of the periods (with respect to the pro forma statements of income). The pro forma financial statements should be read in conjunction with the historical summaries of revenues and direct operating expenses of the properties included herein and with the financial statements of the Company as filed in their Form 10-KSB. The pro forma financial statements should not be construed as a reflection of the financial position or results of operations that actually would have occurred if the acquisition would have occurred on the above dates.

FIELDPOINT PETROLEUM CORPORATION

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2003

ASSETS
 

Historical 
Amounts

  

Pro Forma Adjustments

  


Pro Forma

CURRENT ASSETS:

          

    Cash

$ 1,395,100 

  

$  (850,000)

(1)

$   545,100 

    Short-term investments

67,428 

  

- 

  

67,428 

    Accounts receivable:

          

        Oil and gas sales

260,043 

  

- 

  

260,043 

        Joint interest billings, less allowance
            for doubtful accounts of $99,192


72,530 

  


- 

  


72,530 

    Prepaid expenses and other current assets

        22,535 

  

                 - 

  

        22,535 

                    Total current assets

1,817,636 

  

(850,000)

  

967,636 

PROPERTY AND EQUIPMENT:

          

    Oil and gas properties

6,192,999 

  

850,000 

(1)

7,042,999 

    Furniture and equipment

51,482 

  

- 

  

51,482 

    Transportation equipment

158,254 

  

- 

  

158,254 

    Less accumulated depletion and depreciation

  (2,108,914)

  

                - 

  

   (2,108,914)

                    Net property and equipment

4,293,821 

  

850,000 

  

5,143,821 

LONG-TERM JOINT INTEREST
BILLING RECEIVABLE, net allowance for doubtful accounts of $44,624



65,184 

  



- 

  



65,184 

OTHER ASSETS

          4,297 

  

                - 

  

           4,297 

                    Total assets

$ 6,180,938 

  

$              - 

  

$  6,180,938 

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

          

    Current portion of long-term debt

$      266,324 

  

$                - 

  

$     266,324 

    Accounts payable and accrued expenses

200,827 

  

- 

  

200,827 

    Oil and gas revenues payable

          60,898 

  

                  - 

  

         60,898 

                    Total current liabilities

528,049 

  

- 

  

528,049 

LONG-TERM DEBT, net of current portion

1,491,802 

  

- 

  

1,491,802 

ASSET RETIREMENT OBLIGATION

496,685 

  

- 

  

496,685 

DEFERRED INCOME TAXES

125,000 

      

125,000 

STOCKHOLDERS' EQUITY

     3,539,402 

  

                  - 

  

    3,539,402 

    Total liabilities and stockholders' equity

$   6,180,938 

  

$                - 

  

$  6,180,938 

See accompanying notes to pro forma financial statements.

FIELDPOINT PETROLEUM CORPORATION

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
TWELVE MONTHS ENDED DECEMBER 31, 2003
 


FieldPoint Petroleum

  

(2)
Properties Acquired

  


Pro Forma Adjustments

  



Pro Forma

REVENUE:

              

     Oil and gas sales

$   2,309,503 

  

$ 186,823 

(2)

$             - 

  

$2,496,326 

     Well operational and pumping fees

        119,872 

  

               - 

  

               - 

  

     119,872 

                    Total revenue

2,429,375 

  

186,823 

  

- 

  

2,616,198 

COSTS AND EXPENSES:

              

     Production expense

1,103,496 

  

43,812 

(2)

- 

  

1,147,308 

     Exploration expense

86,948 

  

- 

  

- 

  

86,948 

     Depletion and depreciation

466,969 

  

- 

  

42,000 

(3)

508,969 

     Accretion expense

24,776 

  

- 

  

- 

  

24,776 

     General and administrative

       451,736 

  

               - 

  

                - 

  

     451,736 

                    Total costs and expenses

2,133,925 

  

43,812 

  

42,000 

  

2,219,737 

OTHER INCOME (EXPENSE):

              

     Interest income (expense), net

(52,291)

  

- 

  

- 

  

(52,291)

     Miscellaneous

7,426 

  

- 

  

- 

  

7,426 

     Realized loss on derivatives

          (5,184)

  

               - 

  

               - 

  

        (5,184)

                    Total other income (expense)

        (50,049)

  

               - 

  

               - 

  

      (50,049)

INCOME BEFORE INCOME TAXES

245,401 

  

143,011 

  

42,000 

  

346,412 

INCOME TAX PROVISION:

              

     Current expense

6,000 

  

- 

  

42,239 

(4)

48,239 

     Deferred expense

        66,000 

  

               - 

  

               - 

  

       66,000 
 

72,000 

  

- 

  

42,239 

  

114,239 

INCOME BEFORE CUMULATIVE
     EFFECT OF CHANGE IN
     ACCOUNTING PRINCIPLE



173,401 

  



- 

  



- 

  



232,173 

CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPLE, net of tax


      (16,506)

  


               - 

  


               - 

  


     (16,506)

NET INCOME

$   156,895 

  

$ 143,011 

  

$   84,239 

  

$  215,667 

BASIC EARNINGS PER SHARE

$           .02 

          

$          .03 

DILUTED EARNINGS PER SHARE

$           .02 

          

$          .03 

WEIGHTED AVERAGE SHARES BASIC

  7,530,175 

          

 7,530,175 

WEIGHTED AVERAGE SHARES
     DILUTED


  7,621,868 

          


 7,621,868 

FIELDPOINT PETROLEUM CORPORATION

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
THREE MONTHS ENDED MARCH 31, 2004
 


FieldPoint Petroleum

  

(2)
Properties Acquired

  


Pro Forma Adjustments

  



Pro Forma
 

(Unaudited)

  

(Unaudited)

        

REVENUE:

              

     Oil and gas sales

$   542,162 

  

$     64,625 

(2)

$              - 

  

$   606,787 

     Well operational and pumping fees

       29,967 

  

                 - 

  

                - 

  

       29,967 

                    Total revenue

572,129 

  

64,625 

  

- 

  

636,754 

COSTS AND EXPENSES:

              

     Production expense

184,849 

  

14,315 

(2)

- 

  

199,164 

     Depletion and depreciation

124,000 

  

- 

  

10,500 

(3)

134,500 

     General and administrative

       91,145 

  

                 - 

  

                - 

  

       91,145 

                    Total costs and expenses

399,994 

  

14,315 

  

10,500 

  

424,809 

OTHER INCOME (EXPENSE):

              

     Interest income (expense), net

(13,797)

  

- 

  

- 

  

(13,797)

     Miscellaneous

       (3,185)

  

                 - 

  

                - 

  

        (3,185)

                    Total other income (expense)

     (16,982)

  

                 - 

  

                - 

  

      (16,982)

INCOME BEFORE INCOME TAXES

155,153 

  

50,310 

  

10,500 

  

194,963 

INCOME TAX PROVISION:

              

     Current expense

4,000 

  

- 

  

17,000 

(4)

21,000 

     Deferred expense

       42,000 

  

                 - 

  

                - 

  

       42,000 
 

46,000 

  

- 

      

63,000 

NET INCOME

$   109,153 

$     50,310 

$    27,500 

$   131,963 

BASIC EARNINGS PER SHARE

$           .01 

          

$           .02 

DILUTED EARNINGS PER SHARE

$           .01 

          

$           .02 

WEIGHTED AVERAGE SHARES BASIC

  7,420,175 

          

  7,420,175 

WEIGHTED AVERAGE SHARES DILUTED

  7,444,665 

          

  7,444,665 

FIELD POINT PETROLEUM CORPORATION

NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION

(1)      Adjustment to reflect the acquisition cost of the oil and gas properties for cash.

(2)      Oil and gas sales and direct operating expenses of the acquired properties for the
           respective periods.

(3)      Adjustment to reflect additional depletion and depreciation expense as if the properties had been
           acquired at the beginning of the respective periods

(4)       Adjustment to reflect additional income tax expense as if the properties had been acquired at the
            beginning of the respective periods.

SIGNATURE

        Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

FIELDPOINT PETROLEUM CORPORATION

Date:   May 26, 2004     

By: /s/ Ray Reaves                              
    Ray Reaves, President